Gemstone Equity Research & Advisory Services

Saturday, April 14, 2018

WEEKLY MARKET OUTLOOK FOR APR 16 THRU APR 20, 2018

WEEKLY MARKET OUTLOOK FOR APR 16 THRU APR 20, 2018

In our previous Weekly note, we had mentioned that we continue to remain in the 27-month long upward rising channel which is the primary uptrend. We had also expected the gains to get extended in the coming week. In line with this analysis, the Markets extended its gains in the Week that has gone by. The benchmark Index NIFTY50 ended the week gaining 149 points or 1.44% on weekly basis.

Global volatility, which was intense in the previous couple of week, has become somewhat less intense and this is likely to benefit the Markets in the coming week. Though we remain little overstretched on the Daily Charts, we expect the coming week to remain resilient to any major downsides. Some consolidation and ranged volatile moves are likely but we expect the Markets to maintain upward bias despite minor intermittent hiccups that we may see in the coming week.

The coming week will see the levels of 10565 and 10690 as immediate resistance levels. Supports come in at 10365 and 10290 zones.

The Relative Strength Index – RSI on the Weekly Charts is 55.1793 and it remains neutral showing no divergence against the price. The Weekly MACD has flattened its trajectory and is moving towards reporting a positive crossover. No significant formations were observed on Candles.

The pattern analysis shows that the NIFTY has attempted to move past its 20-Week Moving Average. This may bring in some short term momentum in the Markets. This will also keep the consolidation moves, if any, less damaging for the Markets.

Overall, there are no signals present on the Charts that may suggest any significant downsides to the Markets. However, NIFTY remains slightly overstretched on the Daily Charts and this may bring in some volatile consolidation. It is important to note that once the Markets are able to navigate itself through some consolidation which seems imminent, it is likely to continue with its up move as the undercurrent continues to remain intact. We reiterate to make use of any corrective bouts that the Markets offer to make select purchases. Sector-specific out performances will be seen.

A study of Relative Rotation Graphs – shows though IT pack has continue to relatively outperform the general markets, the evident loss of momentum continues and this should be taken with a caution. Apart from this, we will see Services sector and FMCG pack continuing to relatively out-perform the general markets. Another important thing to notice is the across the board, all broader indices have shown sharp improvement in the relative momentum. Therefore, we will see components of CNX 100, 200, 500, NIFTY Next 50, NIFTY MidCap 50 and 100 pack selectively bettering their performance and relatively out-performing the Markets. This is despite the fact that these pack remain the Lagging Quadrant. No significant performance is expected from REALTY and PSU Banks. ENERGY and AUTO are expected to show scattered out-performances.

Important Note: RRG™ charts show you the relative strength and momentum for a group of stocks. In the above Chart, they show relative performance as against NIFTY Index and should not be used directly as buy or sell signals.

(Milan Vaishnav, CMT, MSTA is Consultant Technical Analyst at Gemstone Equity Research & Advisory Services, Vadodara. He can be reached at milan.vaishnav@equityresearch.asia)

Milan Vaishnav, CMT, MSTA
Technical Analyst
(Research Analyst, SEBI Reg. No. INH000003341)

Member:
CMT Association (Formerly known as Market Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA), CANADA
Society of Technical Analysts (STA), UK
www.EquityResearch.asia
http://milan-vaishnav.blogspot.com

+91- 70164-32277 / +91-98250-16331
milan.vaishnav@equityresearch.asia
milanvaishnav@yahoo.com

Friday, April 13, 2018

MARKET OUTLOOK FOR FRIDAY,APR 13, 2018

MARKET OUTLOOK FOR FRIDAY,APR 13, 2018

After deliberating in the first half of the session, the NIFTY attempted to move past its 50-DMA and 200-DMA and inch higher. The Markets ended in the green for the six day in a row with the NIFTY gaining 41.50 points or 0.40%. The Markets saw a brief consolidation near the 50-DMA and the 100-DMA mark which remain in extremely close vicinity at 10413 and 10444 respectively.

As we approach the last trading day of the week, we may again see Markets opening on a quiet note. The zone of 10480-10500 zones will be important and if these are not clearly breached on the upside, the Markets still remain prone to consolidation and some profit taking bouts at higher levels. However, the undercurrent continues to remain buoyant.

The levels of 10480 and 10535 will play out as immediate resistance area for the Markets. Supports come in at 10415 and 10365 levels.

The RSI on the Daily Chart is 58.4023 and it has marked a yet another 14-period high which is bullish. However, RSI continues to remain neutral showing no divergence against the price. The Daily MACD stays bullish while trading above its signal line. On the Candles, and engulfing bullish line occurred. This is not out rightly bearish but it certainly warrants some caution at current levels as this formation has occurred after an up move. This has potential to halt the up move temporarily and push the Markets into some consolidation.

As of now, pattern analysis suggests that NIFTY has managed to inch higher than its 50-DMA and 100-DMA and has managed to close a notch above that. However, given the present structure of the Chart, we still cannot rule out some consolidation at higher levels.

Overall, there is no denying the fact that the undercurrent remains buoyant. However, we cannot overlook the present short term formations which point towards likely consolidation happening at current levels. We see high probability of Markets witnessing some profit taking bouts at higher levels with very limited downsides. Also, the high PCR levels (Put to Call Ratio Levels) too point towards some likely pause in the up move. While expecting Markets to consolidate at higher levels, we advise vigilant protection of profits at higher levels while continuing to use downsides to make select purchases.

STOCKS TO WATCH:

Favorable technical setup is observed in stocks like KPIT, TCS, SUBEX, INFIBEAM, M&M Financial, CAMLIN FINE SCIENCES, RADICO KHAITAN, CYIENT, TATA CHEMICALS and JAI BHARAT MARUTI.